The Financial Times reports that Iran is pricing its oil to move:

Iran is trying to skirt US and European sanctions by luring nations to buy its oil on highly advantageous credit terms, say officials in the industry.

Tehran has been offering a handful of potential customers in Asia, including India, 180 days of free credit, according to the officials....Iran’s offer of longer payment periods amounts to a discount of about 7.5 per cent per $118 barrel. Saudi Arabia and other leading Middle East oil producers extend 30 days of credit, and Tehran in the past has allowed importers such as China to pay in 60 to 90 days.

So Iran is now reduced to about the same level as a used car dealer. Drive it off the lot, no payments for six months! Apparently the Apologizer-in-Chief's sanctions are starting to bite.

"Apparently," sighs Matt Yglesias, "the ridiculous political attack line we're supposed to talk about today is Mitt Romney's claim that 92.3 percent of jobs lost since Barack Obama took office belonged to women." You betcha! Mainly, though, this is interesting as an object lesson in how to mislead with statistics. As a political attack, it's too lame to last more than a day or two.

So do you want to know how Team Romney came up with this number? The chart below, which shows job losses among men and women, tells the tale. If you look at jobs lost since the beginning of the recession, here's what you get:

  • Men: 3,321
  • Women 1,840
  • Total: 5,161
  • Percent women: 36%

But that's too boring! As you can see, there was a steep job loss among men right at the beginning of the recession and a slower job loss among women. So what happens if you just lop off that bit of the recession and count only the strength of the recovery since January 1, 2009? Well, men have recovered steeply and women have recovered more slowly. So now we have:

  • Men: 57
  • Women: 683
  • Total: 740
  • Percent women: 92%

Pretty snazzy, eh? Men have made up ground faster than women since January 2009, so technically that means that women have sustained the bulk of the job losses since then. Very clever indeed. Politifact has more here.

ALSO WORTH NOTING: It's important for Romney to start on January 1, even though Obama wasn't inaugurated until January 20. Why? Because if you started on February 1, you'd end up with women accounting for something like 300% of all job losses, and that's ridiculous enough that it would give the whole game away. Even the rubes wouldn't buy that.

I finished reading Rachel Maddow's Drift a couple of days ago, and right off the bat I want to say that I'm glad she wrote it. Too many books from TV talking heads are just tired rehashes of whatever the issue of the moment happens to be, barely worth cracking open unless you've spent the past year vacationing on Mars. But Drift is different: It's about a topic that isn't especially sexy right now, and definitely doesn't get enough attention. With Iraq winding down, the economy still sluggish, and domestic politics dominating the headline, Maddow decided to write a book about America and the way we use our military. Specifically: Why is it so damn easy to go to war these days?

It's a good question, and it's unfortunate that it's regularly trivialized by mountains of snark. This is Maddow's stock in trade, of course, and I guess you have to expect a certain amount of it. But this is a more thoughtful book than it sometimes lets on, and the snark too often obscures that. It also, I suspect, makes the book off-putting for anyone who's not already a fan.

If you can get past that, though, there's a deadly serious argument here that deserves way more attention than it gets. The book is, basically, a series of potted histories that explain how we drifted away from our post-Vietnam promise to make sure we never again went to war without the full backing and buy-in of the American public. Maddow's premise is that, just as the founders intended, our aim was to make war hard. Presidents would need Congress on their side. The Abrams Doctrine ensured that reserves would have to be called up. Wars would no longer unfold almost accidentally, as Vietnam did.

And for a while that was the case. Sure, there was Grenada, but that was a small thing. And the contras in Central America and the mujahideen in Afghanistan. But the real breakdown, Maddow says, started almost accidentally at the end of the Reagan administration, when Attorney General Ed Meese, desperate to defend Reagan's conduct in the Iran-Contra scandal, insisted that the president had the right to ignore congressional restrictions on his war-making capability. His commander-in-chief powers gave him all the authority he needed to do anything he wanted.

George H.W. Bush bought into this heart and soul, resisting until the last minute the suggestion that he needed Congress' approval for the Gulf War. That was 500,000 troops! But even so, Bush was apoplectic over the idea that he needed anyone's permission to deploy them. The Meese Doctrine was gaining ground. But there was more. The next decade brought the rise of contracting, and once that ball got rolling, it meant that wars no longer always needed a call-up of the reserves. Logistics could be farmed out instead:

By the time Bill Clinton left office in 2001, an Operation Other Than War, as Pentagon forces called them, could go on indefinitely, sort of on autopilot—without real political costs or consequences, or much civilian notice. We'd gotten used to it.

By 2001, the ability of a president to start and wage military operations without (or even in spite of) Congress was established precedent.

…By 2001, the spirit of the Abrams Doctrine—that the disruption of civilian life is the price of admission for war—was pretty much kaput.

By 2001, we'd freed ourselves of all those hassles, all those restraints tying us down.

And it only got worse after that. The CIA and JSOC have become largely unaccountable branches of the military. Drone warfare has lowered the cost of war even further. And the reserves are no longer really reserves. They're practically full-time soldiers.

And the worst part is that all of this is virtually invisible to most of us. The vast bulk of the civilian population, especially among the college-educated elites who run the country, doesn't serve in the military and never has. In a lot of cases, we barely even know people who have. When we go to war, there's no WWII-style rationing to worry about, there's no draft, and there aren't even any taxes to pay. It's all free! Is it any wonder that we fight so many wars?

Maddow's argument is that we need to start rolling back these changes of the past two decades. When we go to war, we should raise taxes to pay for it. We should get rid of the secret military. The reserves should go back to being reserves. We should cut way back on the contractors and let troops peel their own potatoes. And above all, Congress should start throwing its weight around again. It's fine to criticize presidents for accreting ever more power to themselves, but what do you expect when Congress just sits back and allows it to happen? Our real problem is congressional cowardice: They don't want the responsibility of declaring war, but they also don't want the responsibility of stopping it. So they punt, and war becomes ever more a purely executive function.

It's a powerful argument, and one that deserves a whole lot more attention than it gets. Snark and all, Drift is recommended reading.

I've been following the whole e-book pricing controversy for a while, but without a huge amount of interest. Nickel version: in the market for actual, physical books, publishers have long sold their titles at a wholesale price to booksellers, who then resold them for whatever price they wanted. Until recently, things worked the same way in the e-book market, with Amazon taking a loss on many titles because they were promoting a uniform $9.99 price in order to encourage adoption of their Kindle e-reader. Publishers didn't like this much and recently switched to an "agency" model, in which they set the price and simply pay the bookseller a cut.

The question is whether the publishers colluded in this action, and today's lawsuit from the Justice Department sure suggests that they did:

The lawsuit said that for at least one year beginning “no later than September 2008,” the chief executives of the publishing companies met once every several months, “in private dining rooms of upscale Manhattan restaurants” to “discuss confidential business and competitive matters, including Amazon’s e-book retailing practices.”

....“These private meetings,” the suit alleges, “provided the publisher defendants’ C.E.O.’s the opportunity to discuss how they collectively could solve ‘the $9.99 problem.’ ”....In early 2010, Steve Jobs, then Apple’s chief executive, suggested to book publishers that they sell e-books using agency pricing; Apple would serve as the online agent and take a 30 percent commission.

The five publishers made agreements with Apple for selling e-books, and Apple, which was about to introduce its iPad to the market, insisted on what is known as a “most favored nation’’ clause, which prohibited publishers from allowing other retailers to sell e-books for less than Apple’s price.

I wonder who ratted them out? One of their own? In any case, I'll be curious to see how this turns out. The collusion may have been illegal, but it's not clear to me that there's really anything anticompetitive per se about the agency model. Likewise, the "most favored nation" clause is standard practice for large customers in virtually every industry, so that doesn't seem especially problematic. The New York Times piece above makes the same point, suggesting that "investigators were zeroing in on the way agency pricing was adopted, not on the pricing model itself." Presumably this means that although any settlement might be bad news for the publishers, who may have to pay fines and agree to some kind of future conduct arrangement, it probably won't affect the price we all pay for books.

The latest brainstorm from Karl Rove & Co. is on the right: a Facebook petition opposing the "Buffett Rule," which would ensure that millionaires pay a minimum 30% tax rate. "Really," says Greg Sargent, "it continues to amaze that people in positions of real influence could venture something this idiotic with no evident sense of embarrassment."

Lack of gall has never been one of Karl Rove's weaknesses, so his lack of embarrassment probably isn't really all that surprising. But what's this all about? It is kind of dumb, after all. My guess: it's just part of a "mud against the wall" strategy. It's not likely to gain much traction, but it's cheap and it might produce some useful feedback. Do enough of this kind of stuff and eventually you find out which message will stick. It's early days.

Matt Yglesias comments on the smartphone market:

Jenna Wortham writes that the Instapaper acquisition and the stunning growth of Draw Something maker OMGPop signals a new era for business strategy in which developing a compelling mobile ap comes first, and developing a Web interface aimed at full-feature PCs coomes second. What she doesn't really do is make clear why this happening—the smartphone market will almost certainly be bigger than the PC market very soon.

That's certainly true from a unit sales point of view, but the part I still don't understand is where the revenue will come from. The problem for the app market is that smartphone (and tablet) apps are so cheap that there's no way their makers will ever make substantial amounts of money. A few days ago I bought my most expensive app ever: $9.99 for Photoshop Touch. That's a lot! But Photoshop for a PC or a Mac will set you back about $400. Adobe would have to sell a helluva lot of copies of Touch for it to ever be a serious money spinner for them.

What's worse, as we all know from news consumption on the internet, once these kinds of low price points get established and people get used to them, it's all but impossible to raise them. With Apple's iPhoto priced at only $4.99, it's not as if Adobe has a lot of room to increase its price.

Obviously there will be plenty of winners in the app market, and some of those winners will get snapped up by established companies at eye-watering prices. Even free apps can occasionally become big profit centers, after all. Still, I wonder how big the smartphone software market will ever be? Even if there are, eventually, twice as many smartphones and tablets as home computers, low app prices will keep the overall market size pretty small. Or am I missing something here?

The latest from across the Atlantic:

Europe's sovereign debt crisis exploded back into life on Tuesday, with markets across the continent rocked by a wave of panic selling amid renewed fears about the impact of savage austerity measures in Spain and Italy.

....Italy and Spain, the eurozone's third and fourth biggest economies, were at the centre of the market turmoil, with investors demanding an increasingly high premium for holding their bonds.

Hopefully the Guardian's reporters are just being a little hyperbolic. But stock markets in the U.S. and Asia were pretty brutalized today too. Phase 4 of the Great Euro Crisis appears to be well and truly imminent.

One of the evergreen arguments in the debate over rising income inequality is that what really matters isn't income, it's consumption. And consumption inequality hasn't been rising all that fast. If you measure what people are actually buying, it turns out that the middle class is doing OK.

To the extent that this was true, it was partly thanks to the fact that the middle class was borrowing ever greater amounts in order to support its consumption habits. But that couldn't last forever. In 2008 all that borrowing came crashing to the ground — taking consumption along with it — and we learned once again that income matters after all. But yesterday Matt Yglesias pointed to a recent paper that adds a whole new dimension to this dispute: the authors (Orazio Attanasio, Erik Hurst, and Luigi Pistaferri) contend that when you correct for well-known problems in the consumption data, consumption inequality has been rising about as fast as income inequality. All the old arguments were just based on faulty data.

The charts below tell the story. They rely on survey data from the Panel Study of Income Dynamics, and for each year from 1980 through 2010 they measure the standard deviation of log income and log consumption. (Why use logs? Beats me, but apparently it's standard practice for this kind of thing.) Standard deviation, of course, is just a measure of dispersion. The bigger the number, the farther apart the highs and lows are from the mean.

The top chart shows the growth of income inequality: it's gone up from about .75 to .95, an increase of .2 units. The bottom chart shows the growth of various corrected measures of consumption inequality. The broadest measures are the two top ones, which have gone up from about .8 to 1.05, an increase of .25 units. Or, as the authors put it, "Taken together, the results from the PSID data [] is that consumption inequality and income inequality tracked each other nearly identically during this time period."

If this is all true, it means that consumption tracks income pretty well, and both have become steadily more unequal over the past three decades. Surprised?

Today I want to tell you a little economic fable. My tale is about a family with two members: Dad and Junior. Dad earns $100 per month in the lucrative field of political blogging. Junior earns $10 per month from his lemonade stand. He uses his money to buy comic books, and if he has any money left over at the end of the month he gives it to Dad, who gives him an IOU in return. Over time, Junior has built up $25 in IOUs from Dad. Needless to say, Dad has long since spent the money that Junior gave him.

Our story opens in January. Junior has discovered some new comic books that he likes, so he starts spending $15 per month on comics. His lemonade income isn't enough to cover this, so he finances his habit by cashing in $5 worth of IOUs each month. This goes on for three months, and during that time Dad has $95 to spend on food, clothing, and other necessities of life.

In March, Junior realizes that he only has $10 worth of IOUs left. At his current rate of comic consumption, he'll run out by the end of May! So he decides to cut back: from now on, he'll buy only $12 worth of comics per month. This means he has to cash in only $2 per month in IOUs.

There are two consequences of Junior's decision to cut back:

  • Dad has $98 to spend instead of $95. This is no mirage. It's real money that he can spend on additional stuff.
  • Junior's stock of IOUs will now last longer. Instead of running dry in May, it will last through August. Again, this is no mirage. His IOUs really will last longer.

Do you see what this means? Both of these things are true. Dad really does have more money to spend, and Junior's stockpile of IOUs really will last longer. There's no effect on total family spending, and no effect on total family debt.

In essence, this is the story of Obamacare and the great "double counting" flap, which has gotten a new lease on life following the release of a new report from Charles Blahous, a Republican trustee for Medicare. Blahous is retailing a conservative story of long standing, namely that Obamacare double counts its planned savings from Medicare.

But it doesn't. In the story above, Dad is the federal government, Junior is Medicare, and the IOUs are treasury bills. When Medicare spending is cut back — as it is under Obamacare — it cashes in fewer treasuries. This means that the federal government has more money to spend on other healthcare needs and that the Medicare trust fund will last longer. Both these things are true. And there's no net effect on either spending or the deficit. Other actions of the federal government, which has unlimited taxing and borrowing power, might increase both spending and the deficit, but this particular mechanism doesn't.

Now, there are other things you can say about all this. You might be skeptical that Obamacare's spending cuts will actually pan out. You might want to re-run the deficit numbers now that HHS has given up on the CLASS Act. You might believe that Obamacare is likely to cost more than anyone estimates right now. That's all fine. Beyond that, you might, as Blahous does, worry that extending the life of the Medicare trust fund will lull everyone into complacency and delay an all-out effort to rein in Medicare spending. Or you could go further, as Blahous also does, and assume that without Obamacare we'd already be feverishly at work cutting back Medicare benefits. The fact that we aren't therefore counts as additional spending and bigger deficits.

That seems to me like an eccentric way of looking at things, but Blahous certainly has the right to do so. What he can't do, however, is pretend that there's double counting here. There just isn't.

UPDATE: Ezra Klein tackles this issue in a more conventional way here.

Apparently Rick Santorum is bowing out of the presidential race. Mitt Romney, the inevitable nominee, is now truly inevitable.